Atascadero appeals withdrawal of $2.7 million in quake funds

Atascadero officials have taken a formal stance against a federal agency’s July decision to take back nearly $2.7 million in aid the city received to temporarily move its city hall offices after the December 2003 San Simeon Earthquake.

Atascadero’s City Administration Building
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Atascadero officials have taken a formal stance against a federal agency’s July decision to take back nearly $2.7 million in aid the city received to temporarily move its city hall offices after the December 2003 San Simeon Earthquake.

It’s too soon to say from where the money would come should the city be required to repay it, said Jeri Rangel, the city’s director of administrative services.

“We’re still at the very beginning stages of the process, so it will be years before we receive an ultimate decision on this,” Rangel added.

Representatives for FEMA couldn’t be reached Thursday.

The issue began in March 2012, when auditors with the Department of Homeland Security’s Office of the Inspector General said the city didn't properly use or account for repair expenses totaling about $8 million after the 2003 quake.

The auditors claimed that the relationship between the city and its now-dissolved redevelopment agency, which was part of the process, was inappropriate because “the two parties are ‘governmental units under common control through common officers, directors, or members,’ ” according to the auditors’ report.

The city is now appealing FEMA’s decision to reverse its support of the expense, saying the federal and state disaster aid was previously approved and lawful.

“We relied on FEMA’s advice and approval all these years and now face a significant funding decrease because the very same agency that once funded us has now changed its mind,” Mayor Tom O’Malley said in a statement.

Atascadero alerted the public to its filed appeal Thursday because the City Council is slated to discuss a contract city staff inked with the Los Angeles branch of law firm Morrison & Foerster to help guide the city through the appeal process. The council can confirm or deny the firm’s contract at its Nov. 12 meeting. The contract’s cost wasn’t immediately available.